S&P 500 versus Emerging Markets

This is the spread between the S&P 500 and the MSCI Emerging Market Index. Notice how the trend has switched in favour of being overweight EM, underweight US. The change occurred as inflation and GDP were upgraded in EM countries, causing the USD to fall against other currencies in 2017, as capital begins to flow out of the US in search of higher yields. The long-term trend favours selling down US stocks and rotating into EM.